Comments on: Subprime Mortgage Crisis: 4 things You Must Absolutely Know http://www.the3dtechnologies.com/2008/05/29/subprime-mortgage-crisis-4-things-you-must-absolutely-know/ All innovations that help people growing their business online. Find your killer graphics for your business online, how to live on a tight budget, extreme frugality, and more Sat, 11 Feb 2012 02:48:49 +0000 hourly 1 http://wordpress.org/?v=3.1.4 By: John Corey http://www.the3dtechnologies.com/2008/05/29/subprime-mortgage-crisis-4-things-you-must-absolutely-know/#comment-24933 John Corey Fri, 30 May 2008 12:00:56 +0000 http://www.the3dtechnologies.com/?p=882#comment-24933 The key to sub-prime and any loan decision is to read the documents. Understand what they say. If the terms of the loan can change in the future what triggers the change and how big is the movement in the payment, the interest rate or other key factors. Too many people borrowed more than they could afford if they considered the possibility that they could not refinance before the reset. They were gambling on conditions that they could not control. If they did so with their eyes wide open all the power to them. If they assumed that interests rates that were at a 40+ year low would continue that way indefinitely maybe they are not the type of people who should be taking out a loan. Either we ban borrowers from making dumb decisions, we educate them as to the range of possible outcomes or we suffer the results when too many do something dumb all together. I prefer the education route as I think people should be allowed their own choice once they understand what they are considering. The key to sub-prime and any loan decision is to read the documents. Understand what they say. If the terms of the loan can change in the future what triggers the change and how big is the movement in the payment, the interest rate or other key factors.

Too many people borrowed more than they could afford if they considered the possibility that they could not refinance before the reset. They were gambling on conditions that they could not control. If they did so with their eyes wide open all the power to them. If they assumed that interests rates that were at a 40+ year low would continue that way indefinitely maybe they are not the type of people who should be taking out a loan.

Either we ban borrowers from making dumb decisions, we educate them as to the range of possible outcomes or we suffer the results when too many do something dumb all together. I prefer the education route as I think people should be allowed their own choice once they understand what they are considering.

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